CODE OF CONDUCT FOR INTERMEDIARIES OF MUTUAL FUNDS

Association of Mutual Funds in India
CODE OF CONDUCT FOR INTERMEDIARIES OF MUTUAL FUNDS
(REVISED)
1. Consider investor’s interest as paramount and take necessary steps to
ensure that the investor’s interest is protected in all circumstances.
2. Adhere to SEBI Mutual Fund Regulations and guidelines issued from time to
time related to distributors, selling, distribution and advertising practices. Be
fully conversant with the key provisions of the Scheme Information Document
(SID), Statement of Additional Information (SAI) and Key Information
Memorandum (KIM) as well as the operational requirements of various
schemes.
3. Comply with SEBI guidelines / requirements issued from time to time in
preparation of sales, promotional or any other literature about any schemes.
Performance disclosures should also comply with the requirements specified
by SEBI. Provide full and latest information of schemes to investors in the
form of SAI, SID, addenda, performance reports, fact sheets, portfolio
disclosures and brochures; and recommend schemes appropriate for the
investor’s risk profile and needs.
4. Highlight risk factors of each scheme, desist from misrepresentation and
exaggeration and urge investors to go through SAI / SID/ KIM before deciding
to make investments.
5. Disclose to the investors all material information including all the commissions
(in the form of trail or any other mode) received for the different competing
schemes of various Mutual Funds from amongst which the scheme is being
recommended to the investors.
6. Abstain from indicating or assuring returns in any type of scheme, unless the
SID is explicit in this regard.
7. Maintain necessary infrastructure to support the AMCs in maintaining high
service standards to investors, and ensure that critical operations such as
forwarding forms and cheques to AMCs/registrars and despatch of statement
of account and redemption cheques to investors are done within the time
frame prescribed in the SID/SAI and SEBI Mutual Fund Regulations.
8. Do not collude with investors in faulty business practices such as bouncing of
cheques, wrong claiming of dividend/redemption cheques, splitting of
applications in the schemes to circumvent regulations for any benefit, etc.

9. Do not undertake commission driven malpractices such as:
a) recommending inappropriate products solely because the intermediary
is getting higher commissions therefrom.
b) encouraging over transacting and churning of Mutual Fund
investments to earn higher commissions.
c) Splitting of applications to earn higher transaction charges /
commissions.
10. Abstain from making negative statements about any AMC or scheme and
ensure that comparisons, if any, are made with similar and comparable
products along with complete facts.
11. Intermediaries shall keep themselves abreast with the developments relating
to the Mutual Fund Industry as also changes in the scheme information and
information on mutual fund / AMC like changes in fundamental attributes,
changes in controlling interest, loads, liquidity provisions, and other material
aspects and deal with the investors appropriately having regard to the up to
date information.
12. Maintain confidentiality of all investor details, deals and transactions.
13. Intermediaries shall keep investor’s interest and suitability to their financial
needs as paramount and that extra commission or incentive should never
form the basis for recommending a scheme to the investor.
14. Intermediaries shall not rebate commission back to investors and abstain
from attracting investors through temptation of rebate/gifts etc.
15. To protect the investors from potential fraudulent activities, intermediary
should take reasonable steps to ensure that the investor’s address and
contact details filled in the mutual fund application form are investor’s own
details, and not of any third party. Where the required information is not
available in the application form, intermediary should make reasonable efforts
to obtain accurate and updated information from the investor. Intermediaries
should abstain from filling wrong / incorrect information or information of their
own or of their employees, officials or agents as the investor’s address and
contact details in the application form, even if requested by the investor to do
so. Intermediary should abstain from tampering in any way with the
application form submitted by the investor, including inserting, deleting or
modifying any information in the application form provided by the investor.
16. Intermediaries including the sales personnel of intermediaries engaged in
sales / marketing shall obtain NISM certification and register themselves with
AMFI and obtain a Employee Unique Identification Number (EUIN) from AMFI
apart from AMFI Registration Number (ARN). The Intermediaries shall ensure

that the employees quote the EUIN in the Application Form for investments.
The NISM certification and AMFI registration shall be renewed on timely
basis. Employees in other functional areas should also be encouraged to
obtain the same certification.
17. Intermediaries shall comply with the Know Your Distributor (KYD) norms
issued by AMFI.
18. Co-operate with and provide support to AMCs, AMFI, competent regulatory
authorities, Due Diligence Agencies (as applicable) in relation to the activities
of the intermediary or any regulatory requirement and matters connected
thereto.
19. Provide all documents of its investors in terms of the Anti Money Laundering /
Combating Financing of Terrorism requirements, including KYC documents /
Power of Attorney / investor’s agreement(s), etc. with Intermediaries as may
be required by AMCs from time to time.
20. Be diligent in attesting / certifying investor documents and performing In
Person Verification (IPV) of investor’s for the KYC process in accordance with
the guidelines prescribed by AMFI / KYC Registration Agency (KRA) from
time to time.
21. Adhere to AMFI guidelines and Code of Conduct issued from time to time
related to distributors, selling, distribution and advertising practices.
22. Intimate the AMC and AMFI any changes in the intermediary’s status,
constitution, address, contact details or any other information provided at the
time of obtaining AMFI Registration.
23. Observe high standards of ethics, integrity and fairness in all its dealings with
all parties – investors, Mutual Funds/ AMCs, Registrars & Transfer Agents
and other intermediaries. Render at all times high standards of service,
exercise due diligence, and ensure proper care.
24. Intermediaries satisfying the criteria specified by SEBI for due diligence
exercise, shall maintain the requisite documentation in respect of the
“Advisory” or “Execution Only” services provided by them to the investors.
25. Intermediaries shall refund to AMCs, either by set off against future
commissions or payment, all incentives of any nature, including commissions
received, that are subject to claw-back as per SEBI regulations or the terms
and conditions issued by respective AMC.

26. In respect of purchases (including switch-in's) into any fund w.e.f. January 1,
2013, in the event of any switches from Regular Plan (Broker Plan) to Direct
Plan, all upfront commissions paid to distributors shall be liable to complete
and / or proportionate claw-back.
27. Do not indulge in fraudulent or unfair trade practices of any
kind while selling units of Schemes of any mutual fund. Selling of units of
schemes of any mutual fund by any intermediary directly or indirectly
by making false or misleading statement, concealing or omitting material
facts of the scheme, concealing the associated risk factors of the schemes
or not taking reasonable care to ensure suitability of the scheme to the
investor will be construed as fraudulent / unfair trade practice.
Note: SID should be read in conjunction with SAI, and not in isolation.